An employee sustaining multiple injuries to one extremity may now be entitled to a loss-of-earning-capacity analysis. In the past, when an injured worker sustained an injury to multiple body parts (e.g., an elbow and wrist or a knee and an ankle) in the same work accident, workers’ compensation benefits were paid as a scheduled member injury to the extremity (e.g., an arm or a leg) based upon the functional loss (i.e., the impairment rating) of that member. Now, the payment of benefits for these injuries must be reevaluated in light of a recent opinion of the Nebraska Supreme Court.
In Espinoza v. Job Source USA, a worker sustained an injury to her right wrist and right elbow. She argued that, because she had sustained injuries involving a “loss or loss of use of more than one member or parts of more than one member,” she was entitled to a loss-of-earning-capacity analysis. Her employer, however, argued both injuries combined to produce a single loss to the arm. The distinction is important under Nebraska’s compensation laws. If the injured worker qualified for a loss of earning capacity analysis, then the workers’ compensation court would consider a variety of factors, such as the employee’s work history, education, impairment rating, and more. If it is a scheduled member, as the employer argued, then the employee would be limited to benefits for the functional loss of use of her arm. In other words, the impairment rating alone. Most of the time, a loss of earning capacity results in higher indemnity benefits and, therefore, higher awards and settlements.
In Espinoza, The Nebraska Supreme Court agreed with the employee. The Court held an employee with multiple injuries in the same extremity suffers a “loss or loss of use of more than one member” under Neb. Rev. Stat. §48-121(3). Accordingly, an employee who sustains multiple injuries to one extremity is entitled to a loss-of-earning-capacity assessment. The employer however can limit damages by showing:
- The accident involved no more than a partial loss of use of one finger or one toe; or
- The schedule “adequately compensates” the employee for his or her loss; or
- The loss will not result in at least a 30% loss of earning capacity.
If any of these three scenarios occur, then the injured worker is limited to his or her impairment rating for each body part.
This recent ruling represents a change from the analysis applied by many of the Compensation Court Judges and is likely to have a profound impact on the management of workers’ compensation cases by increasing costs to insurance carriers and employers as a result of the increased need for loss-of-earning-capacity evaluations, as well as creating the possibility of higher awards and settlements. Consequentially, employers are likely to face increased premiums and, under some factual scenerios, protracted litigation.
If you have any questions, please do not hesitate to contact one of our workers’ compensation attorneys.